Trade Liberalization, Financial Development and Economic Growth in The Long Term: The Case of Turkey

Kar, Muhsin; Peker, Osman; Kaplan, Muhittin

doi:10.2478/v10033-008-0012-x

Cited by 21 publications

(15 citation statements)

References 76 publications

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“…Further a 1% increase in FDI impedes growth in real GDP by 0.254% in Bangladesh. This result is consistent with the earlier findings of Hye (2011) for India but not with those found by Ang (2007); Khan and Qayyum (2007); Kar et al (2008), and Hye and Dolgopolova (2011) for Malaysia, Pakistan, Turkey, and China respectively, on average ceteris paribus. These authors found that a 1% increase in FDI increases economic growth by 0.096, 1.029, 0.015 and 0.25%, respectively.…”

Section: Resultssupporting

confidence: 94%

“…Khan and Qayyum (2007) chose four indicators of financial development to construct FDI for Pakistan: total bank deposit liabilities; clearing house amount; private credit and the stock market capitalization, each as ratio of GDP. Kar et al (2008) used three proxies of financial development (M1/Y; M1/M2 and M2/Y) 11 for financial liberalization index for Turkey. Hye (2011) constructed financial development index for India by using four proxy indicators of financial development -market capitalization of listed companies, liquid liabilities and domestic credit to private sector as a percentage of GDP, and M2/M1.…”

Section: Construction Of Financial Development Indexmentioning

confidence: 99%

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Does Financial Development Hamper Economic Growth: Empirical Evidence From Bangladesh

Hye

Islam

2012

Journal of Business Economics and Management

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The objective of this study is twofold. (a) Construct the first ever financial development index (FDI) for Bangladesh using the principal component method (PCM). (b) Use the FDI to explore the existence of a long run relationship between FDI and economic growth. The Augmented Dickey Fuller and the Ng-Perron unit root tests have been applied to examine the stationarity properties of the series. To explore a long run relation, the Autoregressive Distributed Lag (ARDL) approach to cointegration; and to assess the stability of the parameters, the rolling window regression approach have been used. The results show that the impact of real interest rate (RIR) and FDI on economic growth is negative. Estimates from rolling window method show that FDI and RIR are negatively related to economic growth for the years 1987, respectively. The results may help policymakers formulate effective financial sector policies as a tool to promote economic growth in Bangladesh.

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Section: Resultssupporting

confidence: 94%

Section: Construction Of Financial Development Indexmentioning

confidence: 99%

Does Financial Development Hamper Economic Growth: Empirical Evidence From Bangladesh

Hye

Islam

2012

Journal of Business Economics and Management

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“…In case of financial development, a 1 percent increase in t lf drives the growth in real GDP by 0.039 percent, given that all else is same. This result is consistent with earlier findings reported by Ang, (2007); Khan and Qayyum, (2007) and Shahbaz, (2009Shahbaz, ( , 2012 and Kar et al (2008) for Malaysia, Pakistan and Turkey respectively. Capital usage has positive impact on economic growth as predicted by the growth theories.…”

Section: Resultssupporting

confidence: 93%

The causal nexus between financial development and economic growth in Kenya

2013

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This paper aims to reexamine the relationship between financial development and economic growth in Kenya over the period of 1971-2011. Since, financial sector plays a vital role in mobilizing and allocating savings into productive ventures, the core issue of this investigation remains important for developing economics. The examination is based on a Cobb-Douglas production augmented by incorporating financial development. A simulation based ARDL bounds testing and Gregory and Hansen's structural break cointegration approaches are being utilized in this study. Cointegration is being found between the series in the presence of a structural break in 1992. It is also being established that, in the long run, development of financial sector has positive impact on economic growth. Here remains an important policy implication for the concerned individuals of Kenya, that is, they may emphasize on financial development to ignite economic growth.

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“…Moving to Nigeria, Chimobi (2010) In Turkey, Kar, Peker and Kaplan (2008) try to empirically estimate the joint impact of trade liberalization and financial development on economic growth. Instead of using common proxies for the issue, the principal components analysis is employed to develop better measures (indexes) for trade liberalization, financial development and the joint effect of both.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial Development, Trade Openness and Economic Growth: A Trilateral Analysis of Bahrain

Altaee¹,

Al-Jafari²

2014

IJEF

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This study investigates the relationship between trade openness, financial development and economic growth for the Kingdom of Bahrain. Time series data are utilized form 1980 till 2012. The vector error correction model (VECM) in combination with innovation of accounting (variance decomposition and impulse response function) analysis are employed to explore the causal relationship between the variables. The stationarity properties of the data and the order of integration are tested using both the Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP) test. All variables are found to be cointegrated indicating the existence of long-run relationship. The empirical findings show that trade openness and financial development have causal impact on economic growth. Conversely, growth is found to have no causal impact on trade and financial development, implying support for "trade-led growth" and "finance-led growth" hypotheses. Furthermore, the results show a short-run causality from financial development to trade openness. The findings suggest that trade openness and financial development are important elements in determining economic growth in Bahrain. Therefore, Bahrain should continue to patronize the development of its financial sector and to allow more trade openness in order to achieve a high and sustainable economic growth.

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Trade Liberalization, Financial Development and Economic Growth in The Long Term: The Case of Turkey

Cited by 21 publications

References 76 publications

Does Financial Development Hamper Economic Growth: Empirical Evidence From Bangladesh

Does Financial Development Hamper Economic Growth: Empirical Evidence From Bangladesh

The causal nexus between financial development and economic growth in Kenya

Financial Development, Trade Openness and Economic Growth: A Trilateral Analysis of Bahrain

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